TaxTMI 
TaxTMI 
2025 (6) TMI 942
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.... Dristi at Rs. 2,75,000 and sustained remaining amount of Rs. 37,76,063; sec68 cannot be applied on sale proceeds of investments; addition sustained of Rs. 37,76,063 is unjustified & is liable to be deleted; relied on Vikram N Chandan (2024) (Mum-Trib); Pardeep Kumar Aggarwal (2016) (Chd-Trib); Mamta Rajiv Kumar Agarwal (2023) (Guj HC). 2. On the facts and circumstances of the case and in law, Id CIT(A) has erred in sustaining addition of Rs. 37,76,063; when 49,500 shares of Quest is received on conversion of earlier investment of 550 shares of Dristi i.e., purchased on 13-11-10 as share certificates issued in name of assessee on 30-11-10 on his request on 20-11-10; as conversion of 550 shares of Dristi into 49,500 shares of Quest is due to amalgamation made on 22-2-12; Id CIT(A) has duly accepted cost of purchase of 550 shares of Dristi at Rs. 2,75,000 and sustained remaining amount of Rs. 37,76,063; addition sustained of Rs. 37,76,063 is unjustified & is liable to be deleted. 3. On the facts and circumstances of the case and in law, Id CIT(A) has erred in sustaining addition of Rs. 37,76,063; onus cast u/s 68 has been discharged by submitted documentary evidence....
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....inancial services Ltd. Therefore the process itself is a sham. In amalgamation no of shares provided is on the basis of value of shares . Here the assessee failed to provide why he was provided with shares worth Rs. 36,77,850/- in lieu of another shares of Rs. 2,75,000/-. Further the assessee sold these share in Rs. 82/- per shares on 08/06/2012 in Rs. 40,51,063/- and claimed L.T.C.G of Rs. 37,76,063(4051,063 -2,75,000). From the above it is clear that the assessee Shri Brijmohan Prasad Gupta has been provided with a bogus L.T.C.G." The findings of the A.O on the aforesaid issue are as follows: "5.15 Without prejudice to above. In assessee own submission that the assessee has purchased shares of M/s. Dristi supplies Pvt. Ltd and made the payment of Rs. 2,75,000/- on 06/08/2011. Then how the assessee was given copies of shares certificate on 13/11/2010 and his name was taken on the share certificate on 30/11/2010. This again shows that the assessee transaction is a sham transaction. 5.16 Further, when the assessee pays Rs. 2,75,000/- on 06/08/2011 for purchase of M/s Dristi supplies Pvt. Ltd (assessee himself stated and provided copy of bank statement f....
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..... Thereafter, M/s Drishti Supplies Pvt. Ltd. Was amalgamated into M/s Quest Financial Services Ltd. And the assesse received 49500 shares on 17.10.2011. The share price of above share was in the range 62.60 to 74.30 from 27.09.2010 to 20.10.2011. The value of 49500 shares was 36,77,850/-. Also, the assesse failed to provide the reason why he was provided with shares worth Rs. 36,77,850/- in lieu of other shares of Rs. 2,75,000/-. Further, the assesse sold these shares at Rs. 82/- per share on 08.06.2012 at Rs. 40,51,063/- and claimed LTCG of Rs. 37,76,063/- (40,51,063-2,75,000). 5.3 During the assessment proceedings, the appellant has replied to the notices issued by the AO. The relevant paras from the assessment order is as under - The scrip Questfin is one of the such company/penny stock identified being used for providing bogus accommodation entry of Long-Term Capital Gain/ Short Term Capital Loss (STCL) by manipulating its share prices by the syndicate of operators. The Director of M/s Sikaria Share & Stock Broking Services Pvt Ltd, Shri Bal Krishna Sikaria in his statement stated that he had provided the entries of Bogus LTCG/STCL etc. to various clients, Shr....
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....G claimed by the assessee is sham transaction. 5.4 Considering the details as per para 5.3 above, I am of the view that the appellant failed to provide evidence for allotment of 49500 shares and also failed to provide the source of such shares. The AO has rightly justified in making addition of Rs. 37,76,063/-. 6. In the result, the appeal of the appellant is dismissed and the action of the AO is upheld." 4. I have carefully considered the facts on record and submissions of the parties herein. The addition had been made u/s.68 of the Act on account of bogus LTCG claimed by the assessee and as per facts of the case emanating from the assessment order, the assessee had acquired 550 shares of M/s.Dristi Suppliers Pvt. Ltd. There was an amalgamation of M/s. Dristi Suppliers Pvt. Ltd. to M/s. Quest Financial Services Ltd. and post this amalgamation, the assessee received 49500 shares. There is detailed discussion in the assessment order where the A.O had brought that this is a colourable device and a bogus transaction of LTCG. I am of the considered view that the order of the Ld. CIT(Appeals)/NFAC is absolutely silent about the issue and bereft of any findings and i....